$23.7 billion Bitcoin options settlement has come to an end, but the market's reaction was beyond many people's expectations—no dramatic fluctuations as imagined, with the price hovering sluggishly around $87,000. It seems calm on the surface, but this is actually the most dangerous signal. Like the oppressive silence before a storm, nothing unusual appears outwardly, but underneath, dark currents are already surging.

Let's first discuss why settlements often trigger major market movements. Before settlement, market makers manage risk by repeatedly buying and selling spot assets to lock the price within a specific range, effectively putting a stranglehold on the market. Once the settlement is completed and this constraint is lifted, the true bullish and bearish forces can be revealed. What's more tricky this time is that the settlement coincided with the Christmas holiday, when major Western institutions are on vacation, causing market liquidity to evaporate by over 45%. In such an extremely shrinking environment, even a seemingly insignificant sell order can trigger chain reactions. A prime example is the sudden drop to 24,000 followed by a quick rebound during the early morning hours.

Looking at the data makes this strange balance even more understandable. Three abnormal phenomena appeared after settlement: First, the Fear and Greed Index remains stuck at 24, an extreme fear level, but the options market's bull-bear ratio is only 0.38. In other words, the number of bullish contracts is three times that of bearish ones, indicating that retail investors and institutional investors are completely at odds. Second, the implied volatility has dropped to a low of 45. According to convention, such ultra-low volatility often foreshadows intense fluctuations.